The Australian Financial Complaints Authority (AFCA) recently announced that it had received over 3,180 COVID-19 related financial complaints including 1,070 general insurance complaints since the coronavirus was declared a pandemic in March.
The AFCA is a non-government ombudsman service providing free, fair and independent help with financial disputes over insurance, banking, credit, advice, investments or superannuation matters.
Speaking to members at an online forum earlier this week, AFCA COO Justin Untersteiner revealed that a majority of COVID-19 related complaints are regarding the denial of travel insurance claims, loan break costs, disputed transactions, requests to extend payment terms as well as delays in early release of superannuation.
Following an increase in complaints relating to COVID-19, he urged financial firms to provide early, proactive communication with consumers.
He said, “Many of these complaints result from poor communication, where a consumer has trouble contacting their firm, does not understand their policy, or is confused about the information they receive.
“To support consumers, we encourage financial firms to ensure their contact details and resources are visible and accessible and allow for genuine engagement with customers to resolve issues early on.”
However, Mr Untersteiner noted that the AFCA anticipates receiving more financial difficulty complaints in the next six to 18 months including an increase in business interruption insurance complaints.
“We expect to see more complaints from vulnerable consumers or others who struggle to repay mortgages or other debts as government and sector support initiatives come to an end. This won’t just be an issue for banking and finance, many will turn to their insurance policies to look for help, and in some cases, they will not be covered which will lead to disputes,” he said.